As the debate over repeal of Personal Injury Protection (PIP) insurance continues inside the Capitol, legislators are on the precipice of making a costly error, resulting in higher rates and more litigation, and benefiting the state’s trial lawyers at the expense of Florida drivers.
The fact is that PIP repeal will raise insurance rates for consumers. Period.
Why? Because auto related litigation will increase, the size of awards will increase, and because the coverage that would replace PIP will cost more. These are not speculative statements; they are the facts based on what has happened in other states where PIP has been repealed.
Now, Florida insurers are on the record estimating more than 40% of Floridians currently purchase less auto insurance than the new proposed minimum limits. For these Floridians, insurers estimate premiums will increase by hundreds of dollars a year — in one estimate by $320 per year; another estimated increases of $580 per year — for a two-car, two-driver policy.
And these increases impact the most price sensitive consumers, for whom significant premium increases mean choosing between carrying the minimum limit or simply driving without insurance.
Chief Financial Officer Jimmy Patronis spoke directly about the impact.
“When you go to the household budget, and you say I’m going to increase your insurance rates by x number of a state mandate, people will make choices. They’re not going to stop paying their property tax bill because they don’t want to lose their home. But they may go naked on their car insurance,” Patronis said.
Others share Patronis’ concerns.
Florida Insurance Commissioner David Altmaier, who directly oversees insurance matters for the state told House members in March that such a drastic change gave him pause, saying he was “not convinced” such a major overhaul to Florida’s insurance markets is a good idea.
In voicing his opposition to the bill on the Senate floor, Sen. Jeff Brandes paraphrased House Speaker Nancy Pelosi’s infamous quote, “We have to pass the bill in order to find out what’s in it.”
With PIP repeal, Brandes said, “In this case, we have to pass the bill to find out how much it costs. That’s no way for the Florida Senate to do business.”
Brandes then pointed out that although the bill has been around for months, the massive changes to the legislation at the last minute on the Senate floor made it impossible to know exactly how much more Floridians would have to pay for auto insurance.
Anyone who doubts Patronis, Altmaier or Brandes need only look to Colorado.
In 2003, Colorado ditched the no-fault PIP system in favor of the same type of mandatory bodily injury protection trial lawyers are pushing in Florida. Insurance rates are now rapidly rising as are the number of uninsured drivers in Colorado.
Florida’s experience would likely mirror Colorado’s longer-term experience — with a corresponding increase in auto insurance related litigation and the size of awards also likely to grow. Today, Colorado is third in the nation for premium increases and sits in the top 10 for overall cost of auto insurance.
The bottom line: Florida’s trial lawyers are putting their own interests above Florida consumers by inviting legislators and Gov. Ron DeSantis to become accessories in a scheme that will hit Floridians hard in the wallet and leave them holding the bag, just as it did in Colorado.